Which of the Following Types of Evidence Is an Auditor

question 96

Multiple Choice

Which of the following types of evidence is an auditor most likely to consider in determining whether internal controls are operating as designed?

• A)A letter from management corroborating inventory pricing.
• B)Questionnaires completed by employees in the receiving department concerning their duties and responsibilities.
• C)Attorneys' responses to the auditor's inquiries.
• D)Direct confirmations of receivables verifying account balances.

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Definitions:

Fixed Costs

Fixed charges that are unaffected by the volume of output or the quantity sold, including rental fees and payrolls.

Production Data

Information related to the amount, type, and quality of goods or services produced.

Contribution Margin

A financial metric that represents the difference between the sales revenue of a product and the variable costs associated with producing that product.

Break-Even Point

The financial position at which total revenues equal total costs and expenses, with no net profit or loss, often used to analyze the viability of a business or project.